Summary balance sheet

Shareholders’ funds as at 17 March 2012 were £5,629 million (19 March 2011: £5,424 million), an increase of £205 million. This is mainly attributable to the continued profitable growth of the underlying business, continued investment in space to support future growth, offset by an increase in the net retirement benefit obligations and net debt.

Property, plant and equipment assets have increased by £545 million, as a result of increased space growth.

Net debt is £166 million higher than at 19 March 2011 due to an investment in property, plant and equipment, with additional debt partly offset by slightly higher cash balances at year-end as a result of improved working capital management.

Gearing increased year-on-year to 35.2 per cent (2010/11: 33.4 per cent), as a result of the higher net debt. Our interest cover moved to 7.5 times (2010/11: 7.9 times), while fixed charge cover was in line with last year at 3.1 times (2010/11: 3.1 times), as was adjusted net debt to EBITDAR at 4.1 times (2010/11: 4.1 times).

As at 17 March 2012, Sainsbury’s estimated market value of properties rose by £0.7 billion to £11.2 billion (19 March 2011: £10.5 billion), driven by property value added of £1.0 billion, partly offset by sale and leasebacks of £0.3 billion. The property value is based on a yield of 4.9 per cent and includes a 50 per cent share of properties held within its property joint ventures.